Finance Your Budget Apple Pay concerns are ‘not about safety’

Apple Pay concerns are ‘not about safety’

apple pay
Five banks are holding out, but 31 other institutions are offering the payment option.
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The bitter Apple Pay dispute preventing thousands of Australians from using their iPhones for contactless payments is not really about security concerns, experts have reassured the public.

Apple Pay allows users to take a photo of their debit or credit card, and then use their iPhone for contactless payments, thanks to an internal antenna that mimics the card.

The Commonwealth Bank, NAB, Westpac, Bendigo Bank and Adelaide Bank have all banded together to demand that Apple give them access to the iPhone’s inbuilt payment antenna so they can develop their own iPhone payment apps.

apple pay
Apple Pay saves and encrypts card details, and then works much like payWave or tap-n-go. Photo: Getty

Those not following the dispute closely will be forgiven for thinking that security is at the heart of it. Both sides have used safety concerns as a “bargaining chip”, according to a marketing expert watching developments closely.

“It’s more of a bargaining chip. The bigger issue that the banks seem to be focussing on, and I think they’ve conceded that there aren’t security concerns anyways, is that it’s all about to what extent fees are payable to Apple,” Swinburne University of Technology’s Professor Steve Worthington told The New Daily.

So bitter is the dispute that the five banks have recruited the consumer watchdog to help them in their fight. They’re asking the ACCC for permission to negotiate with Apple as a bloc, rather than individually. The watchdog is expected to hand down its decision later this month.

Here’s where security comes in. One of the banks’ earlier demands was reportedly a set of security guidelines it wanted to impose on Apple.

To defend its ‘Apple Pay or nothing’ policy, Apple argued that giving the banks access to its antenna (technical term: NFC inductor) would weaken security.

But the dispute really just boils down to money, a software expert told The New Daily.

“This is not really about security at the end of the day. This is just the banks not wanting to pay Apple part of their commission,” said Dr David Glance, director of The University of Western Australia’s Centre for Software Practice.

“It’s absolutely clear that the only reason the banks are doing this is, No.1, just an ‘eff you’ to Apple. And the other one is the fact that somehow they believe that they can use this as a negotiation [ploy].

“I don’t know why [Australians] wouldn’t think it was secure. That’s exactly what Apple is arguing – that because it’s closed and integrated with the operating system, because they have their controls over what runs on the phone, it is actually much more secure than just opening up NFC direct to the banks.”

Here are other reasons why Apple Pay is probably safe:

  • Payments cannot be processed without a recognised thumbprint;
  • Apple says it does not store card details on its servers, so it is theoretically impossible for hackers to break into Apple’s computers and steal card numbers;
  • Within the iPhone, card details are encrypted, so it would be very difficult, if not impossible, for hackers to break into your phone remotely and steal card numbers;
  • If you lose your payWave card, you have to phone the bank to get it disabled, whereas with Apple Pay you can login from a computer and disable it yourself.

Swinburne’s Prof Worthington predicted it will be the ‘why bother?’ factor, not security concerns, that will hold back Apple Pay in Australia. Given the popularity of payWave and tap-n-go … why bother?

But if you do want to use it, there is a growing number of financial institutions offering it, including:

  • American Express (if the card was issued by Amex directly)
  • ANZ (American Express credit, MasterCard credit, Visa credit and debit)
  • Bank Australia
  • Bank of Sydney
  • Beyond Bank Australia
  • Big Sky Building Society
  • CAPE Credit Union
  • Central West Credit Union
  • Community Alliance Credit Union
  • Community First Credit Union
  • Credit Union SA
  • CUA
  • Defence Bank
  • EECU
  • First Option Credit Union
  • Goldfields Money
  • Goulburn Murray Credit Union
  • Holiday Coast Credit Union
  • Horizon Credit Union
  • Intech Credit Union
  • Laboratories Credit Union
  • MyState Bank
  • Northern Inland Credit Union
  • People’s Choice Credit Union
  • Police Bank
  • QT Mutual Bank
  • Select Encompass Credit Union
  • South West Slopes Credit Union
  • Sydney Credit Union
  • Teachers Mutual Bank
  • The Mac
  • Warwick Credit Union
  • Woolworths Employees’ Credit Union

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